Biggest fall this year for house prices in London

London house prices plunged by 2.5 per cent last month to record their biggest fall so far this year, official figures revealed today.

Statistics from the Government's Land Registry show that prices in the capital are falling faster than anywhere else in the country.

The average London home sold last month cost £345,136 - nearly £10,000 less than in May.

The biggest drop was 2.7 per cent in Hammersmith and Fulham while in Bromley prices were 1.6 per cent down, and Richmond, they were 1.3 per cent lower. The best performer, Kensington and Chelsea, recorded only a 1.1 per cent increase.

House prices nationally fell by one per cent last month. The figures are particularly significant because, unlike other house surveys, they are based on actual sums received by vendors.

A separate report, commissioned by the National Housing Federation, today claimed prices in London would rise by 15 per cent by 2013.

Produced by Oxford Economics, it said prices would continue to fall this year and next but begin rising in 2010 as demand outstripped supply. However, experts have predicted a 20 to 25 per cent fall in London by 2010.

The 2.5 per cent drop reported by the Land Registry is five times greater than the next worst monthly figure in the capital this year. Despite this, the average price is still 2.4 per cent higher than in June last year.

Outside the capital, falls last month were steepest in the East at 1.9 per cent and the West Midlands and Wales at 1.7 per cent and 1.6 per cent respectively.

The West Midlands recorded a yearon-year drop of 2.3 per cent, while Wales and the South West had a 1.3 per cent fall.

Apart from Kensington and Chelsea, the only other London boroughs to see prices rise last month were Havering, up 0.3 per cent increase, and Southwark and Kingston both up by 0.1 per cent.

The Nationwide, which records the amount approved for lending to buyers, is expected to release figures on Wednesday recording a 7.5 per cent fall year-on year.

The latest data come as property intelligence group Hometrack said prices in England and Wales fell for the 10th month in a row, losing 1.2 per cent of their value.

The average property cost £168,500, the same as in October 2006.